Georgia is initiating creation of regional energy market

Georgia is initiating creation of regional energy market

Speaking at the Ministerial Conference on the European Energy Charter in Tbilisi, Prime Minister Irakli Garibashvili said that the construction of new transmission lines for electricity flow between the regional states "forms the basis for the establishment of a regional energy market with the participation of Georgia, Azerbaijan, Iran, Turkey, Russia and Armenia." According to the Georgian Prime Minister, the formation of such a system will "improve cross-border trade in electricity in the region.’’

The mention of Armenia on this list can be attributed with high probability to the Georgian Prime Minister’s attempt to show overly political correctness, or neutrality towards their neighbors: Azerbaijan and Armenia. Irakli Garibashvili cannot but know that the Azerbaijani leadership has repeatedly stated that Baku won’t participate in any regional project together with Armenia while the Armenian armed forces are occupying a part of Azerbaijani territory. It is a missed benefit for Armenia in all possible projects, not just for the regional energy market, but also large-scale implemented projects without Yerevan’s participation. They are the Baku-Tbilisi-Ceyhan (BTC) and Baku-Tbilisi-Supsa (BTC) oil pipelines, as well as the Baku-Tbilisi-Erzurum (BTE) and the Baku-Tbilisi-Kars (BTK) gas pipelines.

Garibashvili presented his initiative in the rank of the acting President of the European Energy Conference, the international organization created in 1995 that unites more than 50 states. "A political platform for the development of cooperation in this direction already exists, the Prime Minister said, explaining it involves multilateral cooperation among Baku, Tbilisi and Ankara in the energy sector, construction of pipelines, as well as the activation of a new transmission line with a capacity of 400kV that connects the electricity systems of Georgia and Turkey through the Zikiliya settlement in the Akhaltsikhe region of Georgia.

The head of the Georgian government said Zikiliya is only the first step, and in the near future the electricity systems of Azerbaijan, Georgia and Turkey will be able to join the new power line. It is an interesting fact that the development of the transmission system will lead to a strengthening of cooperation with Russia, as the existing transmission lines belong to the Russian-Georgian company Rosgruzenergo. Thus, there is a technical possibility of increasing the energy flow from Russia to Turkey.

It's no coincidence that Garibashvili drew attention to this important detail in the conditions of continuing tension of Russian-Turkish relations. The Premier stressed that new projects on power flows can be made with the development of the larger project Black Sea Wave, initiated in the framework of the Black Sea Economic Cooperation. This organization was established in 1992 at the proposal of Ankara. It has become a generator of many useful ideas for the development of cooperation in the Black Sea basin, including the circle road and Energy Exchange on existing, or prospective lines. 

It is also important to consider that Azerbaijan, Iran and Russia agreed to merge their energy systems long before the initiative of Tbilisi. Deputy Energy Minister Natig Abbasov recently informed about it. Russian Energy Minister Alexander Novak spoke about the necessity for the resumption of tripartite talks on the issue. According to him "the matter of the creation of a North-South energy corridor has always been on the agenda."

Speaking at the conference in Tbilisi, the Georgian Prime Minister also focused on the development of the North-South energy corridor, as part of the general system of electricity flow between the neighboring countries.

The statements of Prime Minister of Turkey Ahmet Davutoglu and Azerbaijani President Ilham Aliyev about the implementation of the TANAP project for acceleration of the construction of the new gas pipeline from the Shah Deniz field in order to deliver natural gas from Azerbaijan to Turkey through Georgia were discussed on the sidelines of the conference, which was attended by more than 100 foreign guests. According to the leaders of the two countries, the project may be carried out by 2018 instead of 2020 as was planned earlier.

According to strange and convoluted tradition, the main skeptic at the conference was the Deputy Prime Minister, Minister of Energy of Georgia, the former defender of FC Milan Kakha Kaladze. He previously spoke about Armenia's participation in the overall project, despite Azerbaijan’s significant objections. "I don't know how realistic the TANAP's implementation by 2018 is, taking into account the huge amount of required works," Kaladze said. According to him, if the new ‘‘big pipeline’’ really starts its work in 2018, Georgia ‘‘won't have to purchase additional volumes of natural gas from other markets, including Gazprom."

The minister, who had doubts, was give an immediate answer by the representative of the Ministry of Energy of Azerbaijan, Parviz Garibzade: ‘‘The Shah Deniz field is an extremely important project for the whole of Europe. It is planned to run 16 billion cubic meters of natural gas via the new gas pipeline through Turkey to Europe. The construction is ahead of schedule and it will probably end earlier,’’ Garibzade said.

The chronic skepticism of the head of the Georgian Ministry of Energy, as well as his statements are actively commented on now in Tbilisi. They don’t correspond to the policies of the Georgian authorities on building priority relations with Azerbaijan in the energy sector. "Kakha was a good football player, but he is an inexperienced negotiator and a poor diplomat," the columnist of Georgian news agency GHN, Mikheil Getsadze, said in an interview with a correspondent of Vestnik Kavkaza. ‘‘That's why he is not restrained in his statements and makes mistakes." According to the interlocutor of Vestnik Kavkaza, "one of his errors was his recent statement about Armenia's participation in regional projects, despite the objections of Baku, as well as public doubts about the priority cooperation with Azerbaijan in the sphere of natural importation of gas." The expert reminded that a month ago the Prime Minister of Georgia had to pay an urgent visit to Baku and hold a face-to-face meeting with President Ilham Aliyev in order to correct the "mistakes" of his Deputy Prime Minister.

It is worth noting that nobody is against the participation of Tbilisi in new economic projects, which are beneficial both for Georgia and other countries of the region, but it is not football, not a game between two teams, where it is necessary to defeat the opponents. Economic cooperation is a process which can involve several countries, and the main regulators of this process are the economic benefits. The result is achieved by testing many options, and creating new ones. It is necessary to maintain and strengthen what has been established, without abandoning the goose that lays the golden eggs at least once a day.

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